""/
Uncategorized

How to Coax Your Employees to Enroll in an HDHP

Employers looking for ways to decrease their group health insurance outlays over the past decade have been turning to high-deductible health plans as they offer lower up-front premiums.

In 2021, 51% of the U.S. workforce was enrolled in one of these plans, according to a recent survey by ValuePenguine.com.

But successfully coaxing your employees to choose an HDHP is not always easy. It means getting the deductible amounts right and educating them on how to best use these plans.

Also, while the plans are not for everyone, they can be a good fit for those who do not use their health plans much, are young and in good health. These employees may instead be overpaying for their premiums if they are not in an HDHP with an attached health savings account (HSA).

The key to encouraging your staff to adopt these plans is to first understand why some are reticent about them, how you can overcome their objections and how you can better tailor the plans for them. The following are the main reasons HDHP adoption may be lagging among covered workers.

Lack of education

One of the biggest hurdles to overcome is that many people are shocked to see the amount of the deductible, even as they save money on their premium. And on top of that sky-high deductible, they still have copays.

If you want employees that would be better suited for an HDHP to actually sign up for a plan, you need to take the extra time to:

  • Explain how HDHPs work and that there is a trade-off for high deductibles in exchange for lower up-front premiums.
  • Provide custom, side-by-side medical plan comparison tables and different medical usage scenarios to illustrate which types of individuals are best suited for an HDHP and which ones are not. (This would include scenarios of individuals who may be high health care users who may not be well suited for an HDHP.)
  • Explain how they can funnel what they save in premiums into an HSA so they can save their money for future medical expenses (more on HSAs later).

After covering all of the above, you should encourage your staff to pencil out the math to figure out which plan is right for themselves and their families. They can do this with the usage scenarios you provide. They may need assistance in doing this and you can encourage them to ask questions so they can make the best decision.

Too-high deductibles

While employees expect an HDHP to have a higher-deductible than a traditional plan, they can be shocked by a multi-thousand-dollar deductible. And many employers offer plans that are at the maximum end of the deductible spectrum.

For 2022, the maximum out-of-pocket deductible for an HSA-linked single HDHP is $7,050 and for a family plan the total deductible is $14,100. The minimum deductible for these plans is $1,400 for a single plan and $2,800 for a family plan.

You can work with us to model out multiple plan design scenarios that will help you save money on your group benefits bill while maximizing plan adoption. These models do a good job of explaining possible annual outlays and savings at different premium and deductible levels. 

You’re not contributing to their HSAs

Employers will often fund HSAs with a matching contribution up to a certain dollar amount, but that’s not required under law. As a result, many employers do not contribute to these accounts. But HSAs are critical to the success of HDHPs.

It’s often hard to impart the importance of an HSA and how it can benefit a worker years in the future. To generate interest, it’s a good idea for the employer to offer to contribute to the account if the employee sets up an account. Once an employer starts contributing, the likelihood of the employee starting to do so increases exponentially. 

When selling them on the benefits, explain that an HSA never expires. Your employees can keep them for life and let the funds grow in value through investments, and then put them to use when they are older or if they have health problems years later.

Additionally, they are funded with pre-tax earnings, and withdrawals are not taxed either.

Tell them this is essentially free money and that at some point this year or far in the future, they may need the money in the account to pay for medical services.

The takeaway

Helping your workforce understand how HDHPs (coupled with an HSA) can benefit them is the best way to encourage them to enroll.

You may not convince everyone that an HDHP is right for them, but if you get through to some of the ones who can benefit from an HDHP, they may share their experience with colleagues later.

""/
Uncategorized

New Rule Requires Greater Health Plan Transparency

The Trump Administration has issued a new rule that will require greater price transparency on the part of health insurers, including the rates charged by in-network physicians and copays and costs of drugs.

The final rule requires health plans and health insurers to disclose on a public website their in-network negotiated rates, billed charges and allowed amounts paid for out-of-network providers, and the negotiated rate and historical net price for prescription drugs.  

The aim of the new rule is to give health plan enrollees more information when it comes to making decisions when seeking out and price-comparing care and choosing medications. With more information about health care costs, health plan enrollees can:

  • Make cost-conscious decisions,
  • Face fewer out-of-pocket surprise bills, and
  • Potentially lower their overall health care costs.

The drug price transparency part of the final rule came as a surprise because it was not included in the original proposed regulations.

The new rules do not, however, take effect right away and different parts will be implement at different times. Nonetheless, it’s important for health plan sponsors and employers to be aware of the rules as they will greatly affect how their employees access and shop for coverage and medications.

Most of the rules do not apply to grandfathered plans. Here’s what they will do once they come into effect:

Transparency for enrollees

Insurers will be required to make available to health plan enrollees the following information:

  • Personalized out-of-pocket cost information (for their particular plan) for all covered health care items and services, including prescription drugs.
  • All underlying negotiated rates for all covered health care items and services, including prescription drugs.

This information must be provided through an online tool on their website and in paper form upon request. Items or services include encounters, procedures, medical tests, supplies, drugs, durable medical equipment, and fees (including facility fees). 

Insurers will be required to make available an initial list of 500 shoppable services that will be determined by the Centers for Medicare and Medicaid, starting with the 2023 plan year. The remainder of all items and services will be required for these self-service tools for plan years that begin on or after Jan. 1, 2024.

Public transparency

Health insurers will be required to make available to the public, consumers, researchers and others the following information in “machine-readable” files:

  • Negotiated rates for all covered items and services with in-network providers.
  • Historical payments to, and billed charges from, out-of-network providers.
  • In-network negotiated rates and historical net prices for all covered prescription drugs by plan or issuer at the pharmacy location level.

The idea behind these changes is to provide opportunities for detailed research studies, data analysis, and offer third party developers the ability to create private apps and websites to help consumers shop for health care services and prescription drugs.

These files are required to be made public starting with the 2022 plan year.

The takeaway

These are final rules but, as mentioned, the part of the rule that affects your group health plan and your employees doesn’t take effect until 2023 as the industry will need time to prepare and comply. 

Once the rules take effect, your covered employees should have a wealth of information at their fingertips when they are shopping and comparing health services and drug information.